FAQ's 

Life Insurance                                                                                      

Life Insurance is the foundation of financial security for you and your family. It protects your financial resources against the uncertainties of life so you can plan for the future.

THE RIGHT POLICY FOR YOU

Today, consumers choose between two basic types of life insurance coverage: term and cash value. Term insurance is a contract for a finite time period (say from five to thirty years) which guarantees to pay a specific death benefit. Premiums for this type of insurance run from $100 to $1,000 or more per month, depending on the policyholder's age and health. If the insured outlives the policy, the beneficiary gets nothing when the policy ends. Coverage stops at the end of the term unless you select a renewal policy.

Many people use Term Insurance to fill a gap of coverage; for example, if they're between jobs. Others like it because it allows families to decrease their coverage as needed; as children leave home, for instance. On the downside, if you wish to continue coverage after the term lapses, you must renew. Depending on such factors as a subscriber's age and health, premiums could easily double within six or eight years. Moreover, insurers are under no obligation to renew your policy at all unless you have purchased a guaranteed renewable policy, and are not likely to do so after you reach the age of 70.

On the other hand, Cash Value Insurance stays in effect for as long as you choose--usually until death. For the long-term benefits if offers (including the option of borrowing against the policy), premiums for this type can run about three times as much as term. Payments are pegged according to one's age and the policy's face value; unlike term insurance, they are apt to stay the same over your lifetime.

An important feature of cash value insurance is that the policy has a savings component. So while a portion of the premium is applied to you death benefit, the larger part gets stashed into a mix of securities which earns a fixed or variable rate of return. This "cash value" grows tax-deferred, and is yours to draw upon for loans. If you cancel the policy, most of these savings are yours for the keeping.

Beneficiaries of cash value insurance receive only the face value of the policy and not the accumulated cash value. So if you have a $200,000 policy with an accumulated cash value of $20,000, your beneficiary would receive only $200,000 at the time of your death and not $220,000.

This is one reason why many folks take advantage of the equity value of their policies well before they die, using the money to buy a new car, fix up their home or fund college costs. (Policyholders usually must wait five years before exercising the loan privilege.) A policy loan is a viable way to get one's hands on some cash if unforeseen needs arise. But this is wise only if there's adequate coverage to begin with, says Vernon J. Brown, certified financial planner and principal of V. Brown & Co. Inc., White Plains, N.Y. "If you need a $5,000 loan and have the means to pay it back in a short period of time, that would be one reason to borrow against your life insurance," says Brown. Otherwise, the penalties are stiff. If the policyholder fails to repay the money, the insurer will deduct it from the principle. This affects heirs, who will walk away with reduced death benefits.

In short, no one should buy insurance strictly as an investment or savings vehicle, says Cheryl Broussard, principal of Broussard/Douglas Inc., an Oakland, Calif.-based assets and mutual fund advisory firm. "Insurance is primarily financial protection for your dependents when you die."

CASH VALUE INSURANCE

Cash value insurance comes in three forms: whole, universal and variable life. The most common cash value product is whole life insurance, which invests your cash reserves in a portfolio of stocks and bonds and offers a fixed rate of return, recently about 4.5%. This was true in the 1980's. Whole life is almost extinct now. The current form is call Universal / Permanent Life Insurance.

Here are some frequently asked Questions and Answers to help in choosing and understanding Life Insurance:

Do I Need Life Insurance?

Life insurance needs vary depending on your personal situation. If you have no dependents, you probably don't need life insurance. If you don't generate a significant percentage of your family's income, you may not need life insurance.

If your salary is important to supporting your family, paying the mortgage or other recurring bills, or sending your kids to college, life insurance is important to ensure that these financial obligations are covered in the event of your death.

How Much Life Insurance Do I Need?

It's difficult to apply a rule-of-thumb because the amount of life insurance you need depends on factors such as your other sources of income, how many dependents you have, your debts, and your lifestyle. Feel free to contact me and we can discuss this question as it applies to you and your specific situation.

The general guideline is between five and ten times your annual salary.

What Type of Policy Should I Buy?

The debate over term versus permanent life insurance goes on. Some experts recommend that if you're under 40 years old and don't have a family disposition for a life threatening illness, go for term insurance, which offers a death benefit but no cash value.

Whole life offers both a death benefit and cash value, but is much more expensive. Half of all cash value policies are surrendered within the first seven years, making the coverage very expensive because some commissions and fees limit the cash value in the early years.

TERM LIFE INSURANCE

Term life insurance is the most basic form of life insurance. It provides coverage for a specified period of time (e.g. 1, 5, 10, 15, 20, 25, or 30 years) in exchange for a specified premium. If the death of the insured individual occurs within this period of time or term period, the insurance company will pay the death benefit. If the term period expires while the insured individual is still living, the policy terminates and no death benefit

The two main types of term life insurance policies are level premium term life insurance and yearly renewable term life insurance.

What is the Return of Premium Life Insurance?

Return of Premium term life insurance is a product that allows you to recover up to 100% of all premiums paid on the policy. If the policy reaches the end of the policy term and there has been no death benefit claim, the insurance company will return all premiums paid on the policy to the policy owner. If the policy is cancelled (lapsed or surrendered) at a point prior to the end of the term, a designated percentage of the premiums paid will be returned to the policy owner. This is almost always optional ride to the base policy and can increase the premium substantially.

What is the Instant Issue Term Life Insurance?

Instant Issue term life insurance is a product that utilizes a simplified underwriting process and streamlined application process. The process can be completed online through our Website in as little as 15 minutes. No medical exam is required with Instant Issue term life insurance. Coverage amounts are limited to $150,000 or less, depending on the insured's age.

What is Permanent Life Insurance?

Permanent life insurance provides coverage and can be more complex, particularly may variable life policies for the life of the insured individual(s). These policies are more complex and expensive than term life insurance. They often accumulate tax deferred cash values from which future premiums can be paid or policy loans can be made. These policies typically stay in force as long as the premiums continue to be paid or until the age of 110.

Some of the main types of permanent life insurance policies are whole life insurance, universal life insurance and variable life insurance.

Will my premium rates change each year?

No, your premium rates are guaranteed to remain the same during the entire term period.

What happens at the end of the life insurance term period?

The life insurance policy will terminate at the end of the term period. However, you may have the option to renew the policy on an annual basis without providing evidence of insurability. The cost to renew annually will most likely be much higher than the previous guaranteed premium rates were, but it may be a valid option for individuals who find themselves uninsurable due to injury or illness.

 What is the payment mode?

The payment mode is the term of premium payments for a life insurance policy. Available modes are annual, semi-annual, quarterly and monthly.

Why is the annual mode less expensive than the others?

This is because insurance companies build in a charge or 'factor' for all modal premiums to cover their cost of billing administration. For example, the quarterly mode requires four billing cycles in a year whereas the annual mode requires only one. The additional charge in the quarterly payment mode helps to cover the extra costs associated with extra billing cycles.

What is the Accidental Death Benefit rider?

The accidental death benefit rider is an optional policy provision that pays an additional amount over and above your policy coverage amount in the event the insured's death is caused by an accident. Even without this rider, your term life insurance policy will pay the stated death benefit in the policy if the insured's death is the result of an accident.

What is the Children's Term Life Insurance rider?

The children's term life insurance rider is an optional policy provision that pays a death benefit for each covered child in the event of that child's death. Life insurance companies will typically provide between $10,000 and $20,000 coverage on the life of each dependent child of the insured, subject to age limitations and other requirements. One rider may cover multiple children.

What is the Accelerated Death Benefit rider?

The accelerated death benefit is a policy provision that allows for the advance payment of a portion of a life insurance policy's death benefit in the event the insured is diagnosed as terminally ill. Requirements vary by insurance company. This rider is commonly an included feature of many term life insurance policies requiring no additional cost. Many carriers charge more for this rider than they do for a face amount equal to the original face value, plus the rider.

Am I required to submit a premium payment with my application?

Submitting premium with your application is optional. Doing so may provide temporary or 'Conditional Coverage' during the underwriting period.

Each company has its own conditions for temporary coverage which are explained in the application. These terms are often used interchangeably between companies. Please read the conditions carefully to determine your eligibility.

There are a few important points to remember:

ý         There are coverage limits on temporary coverage and they vary by company.

ý         Premium is required to be submitted with the application for temporary coverage.

ý         Coverage begins and ends at various points in the process, depending on the company.

What is a paramed exam, why is it required, and how do I schedule one?

Many insurance companies require a basic paramed exam in conjunction with a life insurance application. They will work with you to arrange your exam at a time and location most convenient to you. The exam takes only about 30 minutes and there is usually no cost to you for the exam.

A basic paramed exam includes the following:

                  ý         Height/weight measurements

ý         Blood pressure readings

ý         Heart rate readings

ý         Urine sample

ý         Blood sample

ý         Medical history questionnaire

Please remember these suggestions as you prepare for your paramed exam:

• Schedule the exam for a time when you will most likely be able to keep the appointment. If the length of your work day varies, try scheduling the exam early in the morning, on a day off, or a weekend.
• Fast for a period of at least 8 hours prior to the exam, preferably 12 hours if possible. This will result in more accurate blood test results.
• If you are an occasional cigar smoker, refrain for as long as possible prior to the test. Increased nicotine levels in your urine will most likely qualify you for tobacco/smoker rates. Of course, you will need to disclose your smoking habits on your application as well.

Depending on your specific circumstances (e.g. age, amount of insurance, medical history, etc.) the insurance company may require additional testing or information. These requirements do not apply to all applicants. Other requirements that may be included are:

• Electrocardiogram
• Chest X-ray
• Treadmill Test
• Attending Physician's Statement
• Medical Records
• Motor Vehicle Report

How can I speed up the process of receiving my insurance policy?

There are many ways you can control how fast a policy is completed, however there a other influences that determine the speed of the application process that you nor Quote Me Now -Health can control. The following is a list of the most important and beneficial tips to speeding up the process.

• Complete your application packet promptly and accurately. This will allow you to receive the application quickly.  This is the biggest delay in the process. If you can complete your application completely and return it within days you can cut weeks of the overall time.
• For corrections, cross through the incorrect information, write in the correct information and initial next to the correction. Do not use white out.
• Respond to me right away with any requests for missing or additional information.
• Schedule your paramed exam as soon as you are contacted to do so.

Who issues the policy; Quote me now-Health or the Insurance Company?

Your policy will be issued by the insurance company you choose to apply with.

Do I need to be a U.S. resident or U.S. citizen to qualify for life insurance?

Most of the Insurance Companies I work with require applicants to be U.S. residents, typically for a period of 3 years prior to the application date. They also require U.S. residency to continue beyond the policy effective date.

Most of the insurance companies require applicants to be U.S. citizens or to hold a permanent visa/green card. Coverage may be available for U.S. residents holding a temporary work visa. Please call for details.

Some of the main types of permanent life insurance policies are whole life insurance, universal life insurance and variable life insurance:

Whole Life

In this more traditional life insurance policy, the premiums stay the same over the life of the policy, which stays in effect until your death, even after you've paid all the premiums. A cash reserve is built up, but you have no control over how it's invested. This type of policy was very popular in the 1980's but now; few insurance companies provide this policy.  

 Variable Life

Variable life polices build up a cash reserve that you can invest in any of the choices offered by the insurance company. The value of your cash reserve depends on how well those investments are doing.

Universal Life

You can vary the amount of your premium with Universal life insurance policies by using part of your accumulated earnings to cover part of the premium cost. You can also vary the amount of the death benefit. For this flexibility, you'll pay higher administrative fees.

How Much Will It Cost?

The least expensive life insurance is likely to be from your employer's group life insurance plan. These policies are typically term policies, which mean you're covered as long as you work for that employer. Some policies can be converted upon termination.

The cost of other types of life insurance varies greatly, depending on how much you buy, the type of policy you choose, the underwriter's practices, commissions, etc. The underlying costs are based on actuarial tables that project your life expectancy. High risk individuals, such as those who smoke, are overweight, or have a dangerous occupation or hobby (for example, flying), pay more.

There are often hidden costs in life insurance policies, such as fees and large commissions, which you may not find out about until after you purchase the policy. There are so many different kinds of life insurance, and so many companies that offer these policies, that unlike most insurance agents I myself will be researching the various policies available to you and recommend the one that best suits your needs. To ensure objectivity, I am not being affiliated with any particular insurance company.

An healthy 30 year-old man could expect to pay approximately $300 a year for $300,000 of term life insurance. To receive the same amount of coverage under a cash value policy would cost over $3,000.

 Summary

Internationally known financial advisor Suze Orman strongly believes that if you want insurance, buy term; if you want an investment, buy an investment, not insurance. Don't mix the two. For the record, unless you're a very savvy investor and understand all the implications of the various types of life insurance policies, I agree with her. The bottom line is that the average person should be purchasing term life insurance.